Shareholders filed a proposed class action lawsuit to stop the U.S. data networking company from being acquired by Alcatel...
Xylan, Alcatel Sued by Shareholders Over $2 Billion Purchase
Xylan, Alcatel Sued by Shareholders Over $2 Billion Purchase Los Angeles, March 4 (Bloomberg) -- Xylan Corp. shareholders filed a proposed class action lawsuit to stop the U.S. data networking company from being acquired by Alcatel SA for about $2 billion in cash.
The suit, filed March 2 in Los Angeles County Superior Court, claims Calabasas-based Xylan is worth much more than the offered price and accuses the company's president, Steve Y. Kim, and five Xylan directors, of depriving shareholders of a fair price for their shares. The suit also accuses Alcatel, Europe's No. 2 phone maker, of forcing Xylan's board of directors to accept an inadequate proposal.
Alcatel, which already owns 6.5 percent of Xylan's outstanding shares, announced March 2 that it would pay $37 for each remaining share in an effort to expand its presence in the U.S. computer-networking market.
In the suit, the plaintiffs say, ''Alcatel is. . . taking advantage of the fact Xylan stock does not fully reflect the company's financial prospects.'' Spokesmen for both companies declined to comment on the suit, saying they had not had time to evaluate it.
Shares of Paris-based Alcatel rose 5/8 to close at 24 3/4, while Xylan shares rose 3/16 to close at 36 3/16.
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Maybe it will be moot if Siemens raises the offer price and provides better terms for the long term investors.
EKS |
